Lease Illustration #2
- Three equal payments are required payable on ,each December 31, starting 12/31/x1.
- Lessor has a required rate of return of 12% which is known to the lessee. Accounting year for both parties ends December 31.
Question: What type of lease is this to the lessor? lessee? More importantly WHY?
Question: What type of present value (PV) situation is this? Single sum &/or annuity? ordinary or due?